Correlation Between IShares SP and Picton Mahoney
Can any of the company-specific risk be diversified away by investing in both IShares SP and Picton Mahoney at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining IShares SP and Picton Mahoney into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares SP Global and Picton Mahoney Fortified, you can compare the effects of market volatilities on IShares SP and Picton Mahoney and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in IShares SP with a short position of Picton Mahoney. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares SP and Picton Mahoney.
Diversification Opportunities for IShares SP and Picton Mahoney
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between IShares and Picton is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding iShares SP Global and Picton Mahoney Fortified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Picton Mahoney Fortified and IShares SP is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on iShares SP Global are associated (or correlated) with Picton Mahoney. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Picton Mahoney Fortified has no effect on the direction of IShares SP i.e., IShares SP and Picton Mahoney go up and down completely randomly.
Pair Corralation between IShares SP and Picton Mahoney
Assuming the 90 days trading horizon iShares SP Global is expected to generate 2.44 times more return on investment than Picton Mahoney. However, IShares SP is 2.44 times more volatile than Picton Mahoney Fortified. It trades about 0.1 of its potential returns per unit of risk. Picton Mahoney Fortified is currently generating about 0.07 per unit of risk. If you would invest 5,112 in iShares SP Global on December 10, 2024 and sell it today you would earn a total of 605.00 from holding iShares SP Global or generate 11.83% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
iShares SP Global vs. Picton Mahoney Fortified
Performance |
Timeline |
iShares SP Global |
Picton Mahoney Fortified |
IShares SP and Picton Mahoney Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with IShares SP and Picton Mahoney
The main advantage of trading using opposite IShares SP and Picton Mahoney positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares SP position performs unexpectedly, Picton Mahoney can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Picton Mahoney will offset losses from the drop in Picton Mahoney's long position.IShares SP vs. iShares SP Global | IShares SP vs. iShares SPTSX Capped | IShares SP vs. iShares Global Healthcare | IShares SP vs. iShares Global Infrastructure |
Picton Mahoney vs. Picton Mahoney Fortified | Picton Mahoney vs. Picton Mahoney Fortified | Picton Mahoney vs. Picton Mahoney Fortified | Picton Mahoney vs. Picton Mahoney Fortified |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Money Managers Screen money managers from public funds and ETFs managed around the world |